There are many tax saving options other than Section 80C which only a few are aware of. Under Section 80C, a taxpayer can lower their overall taxable income by a maximum of Rs 1.5 lakh per year.
As there is a limit of Rs 1.5 lakh per year, most taxpayers wish to reduce their taxes. Today, we will tell you other tax saver sections other than Section 80C that will help you save some additional tax.
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1. NPS Account – 80CCD (1B)
National Pension System or NPS is another tax saver section that allows deductions up to Rs 1.5 lakh per year by investing in the scheme. It is a social security scheme by the central government open to all private and government employees, except for the armed forces.
Taxpayers who are either employed or self-employed are eligible for an additional deduction of up to Rs 50,000 available under Section 80CCD(1).
2. Health insurance premium – Section 80D
Under Section 80D of the Indian Income Tax Act, it allows tax deduction from the total taxable income for the premiums payment of health insurance along with expenses transacted for health care. Under this section, you are allowed to claim a tax deduction of up to Rs 25,000 per financial year for you, your spouse and your dependent children.
The medical insurance premium paid for parents qualifies for an additional deduction of Rs 25,000 if they are senior citizens. Â
3. Paying Rent – Section 80GG
Salaried employees living in a rented house can reduce their tax amount with the help of the House Rent Allowance (HRA). Under Section 80GG, taxpayer individuals can claim a tax deduction on the rent they pay for their accommodation.
The salary component received as HRA is deducted from the taxable salary income under the income tax Act. However, HRA is completely taxed if the employee does not live in a rental home.
4. Education loan repayment – Section 80E
Tax advantage on interest paid on an educational loan for higher studies qualifies for an income tax deduction. Students who have taken out college loans are eligible for a tax break on the interest portion of the loan under section 80E. This benefit is available to either the parent or the kid (student), whoever repaying the education loan.
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5. Home loan interest payment – Section 24
The principal part of an in-home loan EMI repaid during the year is deductible up to Rs 1.5 lakh under section 80C, while the interest paid is deductible up to Rs 2 lakh under section 24.
Taxpayers with home loans can claim tax deduction under section 24 on the interest portion of their home loan. The tax benefit is only accessible if the residence is occupied within 5 years after the loan’s closing date.
